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The government is reportedly preparing to soften the impact of forthcoming increases to business rates for pubs in England, sources indicate.
An announcement is expected in the coming days outlining changes to the calculation of business rates for pubs, leading to smaller increases in their bills.
Treasury officials have acknowledged the financial pressures facing many pubs following substantial rises in the rateable value of their properties.
This move comes after sustained pressure from landlords and industry groups, including instances where over 1,000 pubs reportedly banned Labour MPs from their establishments.
Sources at the BBC understand that the relief will be specific to pubs and will not extend to the broader hospitality sector.
The Treasury is also considering easing licensing regulations to allow for extended opening hours and increased outdoor seating areas for patrons.
In her November Budget, Chancellor Rachel Reeves reduced business rate discounts, in place since the pandemic, from 75% to 40%, with a complete removal of the discount scheduled for April.
This, coupled with significant upward adjustments to the rateable values of pub premises, has left landlords facing the prospect of considerably higher rates bills.
A campaign to mitigate the impact of these increases has gained momentum in recent weeks, with pub owners and industry representatives actively lobbying for additional support.
DWP minister Dame Diana Johnson stated that discussions between the government and the hospitality sector are “ongoing.”
Speaking on Radio 4’s PM program, she said: “We as a government want to make business rates fairer, but you’ll also know we’re coming to the end of the transitional relief that was available because of Covid.”
On Wednesday, Labour MPs urged the government to reconsider its support for the industry.
Conservative leader Kemi Badenoch commented: “What has happened is that over Christmas Labour MPs were banned from every single pub they tried to get into… so now they are pushing for a U-turn.”
She stated that the Conservatives had a “much better plan,” which was to “slash business rates for all of the High Street, not just pubs,” adding that business rates bills of less than £110,000 would be eliminated entirely.
Reform also welcomed the potential change, noting that “pubs have already been lumbered with astronomical energy costs.”
The party’s deputy leader, Richard Tice, stated: “Pubs are the backbone of our communities and a huge part of British heritage. Their closures would be a cultural catastrophe as much as an economic one.”
The calculation of a pub’s business rate bill involves multiplying the rateable value of its premises by a set figure known as “the multiplier.”
The government has already provided some relief by reducing the multiplier for pubs and may be poised to lower it further.
Alternatively, they could increase the £4.3bn “transitional relief” fund established to ease the impact of withdrawing support following the pandemic.
Geoff Robbins, owner of the Wheatsheaf Pub in Faringdon, Oxfordshire, along with his wife Jo, expressed “great relief” at the prospect of additional assistance.
His rates are projected to increase by approximately 80% over the next three years, requiring a significant discount after accounting for higher gas, electricity, and staffing expenses.
“Rates are a tax against your business whether you make a profit or loss… you’ve got to pay, there’s no way round it,” said Geoff, who contacted BBC Your Voice.
Industry groups have also responded positively to the news of potential additional aid.
Emma McClarkin, chief executive of the British Beer and Pub Association, described it as “potentially a huge win” for the sector.
“This could save locals, jobs, and means publicans can breathe a huge sigh of relief,” she added.
Kate Nicholls, chair of UK Hospitality, representing the broader industry, argued that the support should extend beyond pubs to encompass all hospitality businesses affected by rising rates, including cafés and restaurants.
“We need a hospitality-wide solution, which is why the government should implement the maximum possible 20p discount to the multiplier for all hospitality properties,” she stated.
Other sectors are advocating for even broader support, encompassing live music venues, theaters, galleries, gyms, and retailers.
Reversing elements of the recent Budget could be perceived by some as another policy reversal, following earlier U-turns on winter fuel payments, disability benefits, and inheritance tax on farms and family businesses.
Shadow business and trade secretary Andrew Griffith asserted that the change demonstrates that Rachel Reeves’ Budget is “falling apart.”
“Labour were wrong to attack pubs and now have been forced into another screeching U-turn,” he said.
Liberal Democrat Treasury spokesperson Daisy Cooper stated: “This is literally the last chance saloon for our treasured pubs and high streets – so the government must U-turn, today.”
“These businesses are worried sick, making decisions now, and can’t wait a minute longer.”
The calculation of business rates is a devolved issue in all four UK nations.
The discount on rates during the pandemic was applicable only to hospitality businesses in England.
Scottish businesses are awaiting the upcoming Budget to learn how the Edinburgh government will address the issue.
Pubs in Scotland will be hoping that the Scottish government follows the UK government’s lead in providing some form of relief.
Additional reporting by Kris Bramwell
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